The Development Ministry steers strategy, two large development agencies execute

The coalition dynamics of Germany’s political landscape form an important backdrop to the country’s development strategy and policy. 

  • Under the cabinet leadership of the Chancellor, the Federal Ministry for Economic Cooperation and Development (BMZ) sets development priorities.

State-owned Development Agencies: GIZ and KfW

  • Germany’s two major state-owned development agencies, GIZ and KfW, play a key role in Germany’s policy development, priority setting, and implementation.

Both operate under the political supervision of BMZ.

  • The GIZ plans and executes Germany’s technical cooperation with partner countries.

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) was formed on 1 January 2011 through the merger of the three implementing organisations for Technical Cooperation, the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), the German Development Service (DED) and InWEnt (Capacity Building International, Germany).

The GIZ brings together the skills and many years of experience of these three organisations. The merger is an important element of the reform of development policy structures in Germany that was agreed upon in the present government’s coalition agreement.

  • KfW Development Bank leads Germany’s financial cooperation.

KfW Entwicklungsbank supports its partners in introducing economically sound and socially just development. The overarching goal of Financial Cooperation is to reduce poverty and improve living conditions, especially for the poorer sections of the population. 

It promotes investment in infrastructure, financial systems and environmental protection, for instance by investing in preserving natural resources. 

By setting up efficient financial systems which offer smaller and medium-sized enterprises new opportunities, new avenues are opened up to boost income and create jobs. In regions hit by crises, for instance, KfW Entwicklungsbank investments in employment programmes help stabilise the social environment.

KfW Entwicklungsbank does not implement its projects itself. The project executing organisation is always an institution in the partner country. 

KfW projects and programmes are always coordinated closely with German Technical Cooperation projects and with the measures of other bilateral and multilateral donors.